Why isn’t a 5 per cent target for 2020 enough?

The Authority concludes that Australia's current minimum 5 per cent target for 2020 is inadequate:

Australia will benefit from global action to keep warming below 2 degrees and avoid the worst impacts of climate change. Australia should be willing to play its part. A 5 per cent target for 2020 would not be a credible start by Australia towards this goal. It would leave an improbably large task for future Australians.

An Australian 5 per cent target does not keep up with the growing momentum of global action on climate change.

Australia can meet stronger targets while the economy and national income continue to grow.

The Authority has also examined the government’s conditions for moving beyond 5 per cent and concludes they have been met.

Why has the Authority recommended a 2020 target of 15 per cent plus 4 per cent carryover?

Australia has 4 per cent credit from past action to reduce emissions (‘carryover’). The Authority recommends this be used to strengthen the 2020 target to 19 per cent.

The Authority believes the recommended 2020 target would be a credible response by Australia to the latest climate science. It spreads the efforts of cutting emissions more fairly between now and future Australians, avoiding higher costs and a more disruptive transition later. It is also more in line with action being taken by countries like Australia, for example the United States and United Kingdom.

What is the cost of achieving the recommended 2020 target and who will pay?

The cost of meeting the recommended targets and who pays will depend on the policies in place. Under the current legislation, if Australia pursues a 5 per cent target gross national income (GNI) per person is projected to grow by an average of 0.80 per cent annually over the period to 2020, or by 0.78 per cent with the Authority’s recommended target of 15 per cent plus 4 per cent carryover.

The Authority has recommended the government establish a fund to purchase international emissions reductions to bridge the gap between domestic reductions and the recommended target. The distribution of the costs of the fund through the economy would depend on how the fund is financed.

The Authority’s analysis shows Australia can achieve the recommended 2020 target while the economy and incomes continue to grow.

Have the government’s 2020 target conditions been met?

The government set out a range of conditions for increasing the 2020 target from 5 up to 25 per cent below 2000 levels.

The Authority has taken the government’s conditions into account, but it is required by law to consider a broader range of factors, including climate science, international action, equity and economic impacts in making its recommendations.

The Authority’s analysis of the government’s target conditions shows that the conditions for moving beyond 5 per cent have been met. Some of the conditions for 15 per cent have been met, others are marginal. The conditions for a 25 per cent target have not been met.

What action is the rest of the world taking on climate change?

Momentum in other countries to address climate change is growing. Ninety-nine countries covering more than 80 per cent of global emissions have made international pledges to reduce or limit their emissions.

The world’s two biggest emitters, China and the United States, are stepping up their climate action. They are investing in renewable energy technologies, introducing carbon pricing in different states and cities, and regulating pollution from cars and power plants.

The Authority’s recommended emissions reduction goals would put Australia more closely in line with the actions of other similar countries, including the United States and United Kingdom.

What progress has Australia made in reducing its emissions?

Australian governments have used policies to reduce emissions for more than two decades, including regulatory measures and market based schemes.

Since 1990, the size of Australia’s economy has doubled while emissions have increased by only a small amount; Australia’s emissions intensity (emissions per dollar of GDP) has halved.

Falling emissions intensity is partly due to the changing composition of the economy, away from emissions-intensive manufacturing. Policy has also played an important role, particularly in the land and electricity sectors.

What are the opportunities for future emissions reductions?

Australia has many opportunities to reduce its domestic emissions, including in:

electricity generation (shifting to lower emissions sources such as renewables)

energy efficiency in buildings and industry, as well as fuel efficiency in transport

installing technologies to reduce or capture gases released in mining and manufacturing

reduced emissions from farming and increased absorption of emissions in soils and vegetation.

Strong and well-coordinated policies are essential to realise these opportunities.

In the short term, genuine international emissions reductions are a cost effective and environmentally sound way to bridge the gap between domestic emissions reductions and the recommended 2020 target.

See Chapter 11 of the report on Australia’s emissions outlook and Chapter 12 on international emissions reductions

Why does the Authority support the use of international emissions reductions?

Genuine international emissions reductions are a cost-effective and environmentally sound way to help Australia meet its goals.

The Authority recommends the government establish a fund to purchase high-quality international emissions reductions to bridge the gap between domestic reductions and the recommended 2020 target.